ECO105Y1 Lecture 24: Are Sweatshops All Bad?
Document Summary
Terms of trade: quantity of exports required to pay for one unit of import. The ratio at which they exchange export for import. For a trade to have mutual benefits, the terms of trade must be somewhere between each trader"s opportunity costs. Competitive innovations, which result from the endless quest for profits, make businesses and labour more productive and improve living standard and product choices for consumers. Structural unemployment - unemployment due to technological change or international competition that makes workers" skills obsolete in canada. Consumers gain from lower prices and greater product variety that result from new imports. Workers in exporting businesses gain from more jobs and higher wages. Canadian businesses that cannot successfully compete with the new imports lose. Workers in import-competing businesses also lose, as their jobs disappear and wages fall with shrinking sales in canada. Tariff is a tax applied to a product/service imported into a country. Tariffs raise revenues for the government to spend.
